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tv   Federal Officials Testify on Efforts to Denuclearize North Korea  CSPAN  September 12, 2017 10:05am-12:30pm EDT

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before we gavel the hearing in, i would just like to remind audience members that disruption of committee proceedings is against the law and will not be tolerated. although wearing themed shirts while seated in the hearing room is certainly permissible, holding up signs during the proceedings, that is not permissible. so any disruptions will result in a suspension of the proceedings until the capital police can restore order. with that, i would -- i'd like to call us to order here for our hearing this morning and ask all the members to take their seats if you could. on september 3rd north korea detonated a nuclear device that according to news reports was
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stronger than all of the previous tests combined. this hydrogen bomb represents the latest advancement in north korea's long-running nuclear and intercontinental ballistic missile programs which now pose an urge gents threat to the united states. moreover, the apparent speed in which these north korean advancements have occurred are challenging the security structure across east asia creating dangerous instability in the region and that instability will likely be dealing with for decades to come. so today this committee is going to discuss the tools that must be deployed and fully utilized to address these threats. and i believe the response from the united states and our allies should be super charged. we need to use every ounce of leverage.
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when i had breakfast this morning with secretary tillerson we layed out these issues. that leverage includes sanctions, it includes diplomacy, it includes projecting information into north korea to put maximum pressure on this rogue regime. time is running out. and let's be clear, sanctions can still have an important impact. north korea's advanced weapons programs rely on foreign sourced technology. much of these programs are made outside the country. north korea pays an inordinate amount of money and it has to have hard currency to do it to run this very expensive icbm program and this nuclear weapons program. since it requires hard currency, that is the achilles heel.
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unfortunately, years have been wasted as sanctions have been weak allowing north korea to access financial resources and build its nuclear and missile programs. any sanction that crimps north korea's access to technology is urgently needed. congress has done its part to ramp up economic pressure. we passed a north korea sanctions act last february authored by myself and mr. elliott angel, our ranking member. in july we increased the tools at the administration's disposal as part of the big sanctions package that we passed here including sanctions on north korea and russia and the iran missile program. part of that included targeting north korean slave labor exports, part of it again refined some of the focus on banking and part of it also
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was -- was focused on exports to ports around the world from north korea. in august the administration secured a major victory with the u nnanimous adoption of u.n. security council resolution 2371 which ambassador haley called the strongest sanctions ever imposed in response to a ballistic missile test. she is now hard at work on another resolution. to be effective, these tools need to be implemented aggressively. the administration deserves credit for increasing the pace of designations, and i appreciate treasury secretary mnuchin's statements that more are coming. but we need to dramatically ramp up the number of north korea designations. these designations do not
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require beijing's cooperation. we can designate chinese banks and companies unilaterally giving them a choice between doing business with north korea or the united states, and i would just observe that not doing business with the united states for many of these companies would risk bankruptcy for these institutions. earlier this year treasury sanctioned the bank of dandong, a regional chinese bank, and that's a good start, but we must target major chinese banks doing business with north korea, such as china merchants bank and even big state-owned banks like the agricultural bank of china. they have a significant presence in the united states, and if they do not stop doing business with north korea, they should be sanctioned now. it's not just china. we should go after banks and companies in any countries that do business with north korea the
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same way. just as we pressed china to enforce u.n. sanctions banning imports of north korea coal and iron and seafood, we should press countries to end all trade with north korea. this grave nuclear risk demands it. sanctions are not the only way to apply pressure on the regime. we must maintain a united front with our allies. i just returned from south korea where people are on edge. we were there when the missile was launched over japan. it doesn't matter if you're talking to government officials there or the business community or the average person on the street, they all understand the threat so i'm pleased that the t.h.a.a.d. missile defense system has been fully deployed. i'm also pleased that the administration is strengthening regional deterrence through additional u.s. arms sales to japan and south korea, which we
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discussed this morning. time bely, we need to do much better at getting information into north korea so north koreans can better understand the brutality and corruption of the self-serving kim regime. and these efforts are already pressuring the regime creating some unrest, increasing defections from north korea, but i'm afraid here our efforts grade poorly. international broadcasting and full my nating dissent have not been a priority and that's unacceptable in this situation. while we should take a diplomatic approach to north korea, the reality is that this regime will never be at peace with its people, its neighbors or us, and now is the time to apply that pressure. with that said, let me turn to the ranking member of our committee, mr. elliott engel of
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new york. >> mr. chairman, thank you for calling this hearing. you and i have worked together for a long time on the korean situation. we had a hearing on this topic to start the year. this committee's worked in a bipartisan manner to advance some of the toughest sanctions ever on north korea which are now u.s. law. yesterday the united nations security council unanimously agreed to a sanction and we are revisiting a sanction today so we can hear directly from the administration. mr. chairman, i'm grateful for your unwavering leadership on this issue. to our witnesses, welcome to the foreign affairs committee and thank you for your service. assistant -- acting assistant secretary thornthon, i have
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tremendous confidence in you and other career diplomats but it's hard to believe nearly eight months into this administration there is no nominee for assistant secretary for east asian and pacific affairs. same goes to our ambassador of south korea, under secretary of arms control, international security and a range of other senior state department officials. this administration has said that north korea is its top foreign policy priority but between the president's dangerous and irresponsible communication on the manner and the inexplek cable reluctance to get personnel in place, he is in my opinion undercutting his own peaceful pressure strategy. i view the kim regime's nuclear program as the single greatest threat to american national security and to global security. right now we need all hands on deck and focused on the same objective. we do that here in this committee, but that objective, of course, also gets to one of
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the main questions. while we all share the desire to rid north korea of nuclear weapons, some have said that kim will never give them up regardless of the pressure. i've been to north korea twice, mr. chairman, as you know, and i can tell you and everybody else that this is not a regime that looks at the world the way that any other government does. the kim regime is bent on self-preservation above all else and is very willing to sacrifice their own people to achieve that end. that makes them obviously incredibly dangerous. the military options in our north korea contingency are incredibly grim and it's hard to understate how devastating a conflict on the korean peninsula would be. if this escalates into a war we could be measuring the cost in millions of lives lost. time is clearly running out. once the regime in pyongyang possesses nuclear weapons that can strike the united states, it
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will immediately raise questions about the reliability of our security commitments to our alliance partners, japan, south korea, nuclear capabilities of its kind would likely embolden the north koreans to engage in other bad behavior such as harassment of our allies and continued proliferation of nuclear technologies. some say the kim regime might seek reunification on its own terms. we need a smart strategy and defendant a deft and consistent administration. administrations of both parties were unable to put a stop to north korea's nuclear program. north korea detonated its first nuclear weapon in 2006 and a few years later the bush administration removed north korea from the state sponsor of terrorism list as an inducement to join the six party talks. since kim jong-un assumed power
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bomb and missile tests have increased in frequency and this year since the start of the trump administration we've seen an alarming increase in the frequency and significance of tests and, of course, the detonation a few weeks ago of what appears to be a thermo nuclear device. so where do we go from here? personally i agree with secretary of defense mattis that we're, quote, never out of diplomatic solutions when it comes to north korea, although i'm not sure president trump shares that view. frankly, i'm not sure he enos what his views are on this. at present, however, kim jong-un doesn't seem to be anywhere close to sitting down for talks of any kind much less sincere negotiations. the first order of business should be to have a moratorium on testing, to halt the progress of north korea's nuclear program. our objective has long been a denuclearized north korea and we cannot lose sight of that aim. in my view we have not exhausted
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economic pressure through sanctions and we need to do all we can to keep pressure up on the kim regime, but at the same time we increase pressure, we must also ramp up coordination with our allies. we must demonstrate the defense of military measures are at the ready both to ensure our allies and deter the regime from any action that could lead to deadly escalation. i'm interested in hearing from our witnesses today about how we're going to pursue those aims. under ordinary circumstances i would say this is a tall order, but i have to say again the president's behavior surrounding this crisis is making the situation even nor challenging. outrageous red lines like fire and fury, shaming our allies through tweets, inconsistency about kim jong-un, china, or our economic partnership with south korea, picking a fight with south korea right at this time, loose talk about expanding america's nuclear arsenal and the proliferation of these devastating weapons, all of these actions undermine the
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credibility of the office of the president and the credibility of the u.s. government. effectively undermining u.s. leadership and driving a wedge between washington and our friends creating grave uncertainty with china whose cooperation we need and with north korea whose leader is, we know, single-minded and ruthless. our country faces a serious national security challenge and we need principled and visionary leadership. we need to stand with our allies, acting with integrity and reconfirming our commitments. the president needs to lead on the global stage and doesn't consent to a better path forward not waiting to see who does what next and then reacting with the first words that come to mind. so i look forward to hearing from our witnesses about what american leadership should look like in this crisis and how we find the right path forward. i thank you again, mr. chairman, and i yield back. >> thank you. this morning we're pleased to be joined by a distinguished panel. we have with us ms. susan
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thornton, acting assistant secretary in the bureau of east asian affairs at the department of state. and as a career member of the foreign service she has spent the last 20 years working on u.s. policy in europe and asia focused on the countries of the former soviet union and on east asia. assistant secretary marshall billingsly is assistant secretary of terrorism and financial intelligence at the department of treasury. he previously served as managing director of business intelligence services for deloit where he focused on illicit finance so we welcome both our witnesses to the committee. without objection, the witnesses full prepared statements are going to be made part of the record and all members here are going to have five calendar days to submit any statements or any additional questions of you or any extraneous material for the
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record and with that i would just suggest -- we'll begin with you, assistant secretary thornton. if you will summarize your remarks and then we'll go to mr. billingsly and then we'll go to questions. >> thank you very much, mr. chairman. chairman roy, ranking member engel, members of the committee, thank you so much for the opportunity to appear before you today to discuss the ever increasing challenge that north korea poses. the threat posed by north korea's ballistic missile and nuclear program is grave. north korea's sixth nuclear test on september 3rd is an unacceptable provocation that ignores repeated calls from the international community for a change in their behavior. it followed the august 28th ballistic missile launch that
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over flew portions of hokkaido, japan, and two icbm launches in july. these provocations represent a tangible threat to the security of japan and south korea, our allies, and to the entire globe. we cannot allow such flagrant violations of international law to continue. north korea has also made dramatic threats regarding its ability to hit guam and other parts of the united states. secretary of defense mattis has made clear that we have the ability to defend ourselves and allies from any attack and that our commitments to our allies remain ironclad. this administration though has developed a clear strategy of applying international pressure to hold pyongyang to account. first we continue to push for a strong -- for strong u.n. sanctions. last night the u.n. security council passed another significant set of international sanctions. the second set of sanctions in the last two months unanimously
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adopted by the u.n. security council. second, we're using our domestic laws to impose sanctions on individuals and entities that enable the dprk's illicit activities. third, we are pressing countries to fully implement the u.n. security council's resolutions and sanctions and to harmonize the sanctions regimes with those security council designations. fourth, we're urging the international community to cease normal political interactions with the dprk and increase its diplomatic isolation. and you choke off revenue sources that finance the regime's weapons programs. even as we pursued denuclearization on the korean peninsula, deter rents, as was mentioned by the ranking member, is a central part of our strategy. we have deployed the t.h.a.a.d.
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anti-missile system to the republic of korea and continue to take other measures whether on the united states, south korea, japan with overwhelming force. we have been clear we are not seeking regime change or collapse in north korea, we do not seek accelerated reunification or want to send troops north of the demilitarization zone. we want to seek peace of the area and a north korea that stops belligerent actions and not presenting a threat to the united states and our allies. the success will depend on success from international part. we are clear identify in china's growing against the dprk. china has implemented sanctions but we would like to see them do more.
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we continue to engage with china and russia to further pressure the dprk, but if they do not act, we will use the tools at our disposal. just last month we rolled out new sanctions targeting russian and chinese individuals and entities that were doing illicit trade with north korea. so while there is more work to be done, we do see encouraging signs of progress on increasing the pressure on the north korean regime. countries spanning the globe have issued strong statements against the icbm tests and the most recent nuclear tests. we've seen countries expel sanctions, north korean officials and prevent them from entering their jurisdictions, reduce the size of diplomatic missions and cancel or downgrade diplomatic exchanges or engagements. in the recent days we've had two announcements by two countries, mexico and egypt, for their efforts to downgrade relations with north korea.
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countries have halted visa issuances to north korean labors and are phasing out the use of these workers. south korea, japan and australia have implemented unilateral national sanctions against targeted entities and individuals and european partners are collaborating with us on the pressure on the dprk. unfortunately, we have yet to see a notable change in the dprk behavior. we will continue to step up efforts to sanction individuals and entities enabling the dprk regime and its weapons programs. following the nuclear test we are pressing hard for a nuclear pro solution. we hope textiles, provisions on oil, provisions on shipping, et cetera will -- will allow us to increase our pressure.
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china and russia should continue to exert their unique leverage, of course, on the dprk and it should be clear that we will never accept north korea as a nuclear state. we'll continue to work within our alliances to develop additional defense measures to protect the united states and our allies. at the same time we will not lose plight of the three remaining u.s. citizens who have been unjustly retained by north korea nor of the egregious human rights violations. we will continue to reiterate our willingness to resolve this in diplomacy. we will have clear eyes with the dprk's past track record of violating agreements. thank you for letting me testify today and i'm looking forward to your questions. >> chairman royce, ranking member engel, distinguished
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members of this committee, thank you for the opportunity to appear before you today to update you on the measures that the treasury department is undertaking in concert with the department of state and the broader administration efforts to deal with the ongoing threats posed by north korea. in order to con strain kim jong-un, we have enacted multiple united security council resolutions. the nations of the world have responded with steadily tightening constraints of sanctions and embargos. under previous administrations they had to have prohibited trade in things such as arms, minerals, month nens. while it's a clearly inhibited north korea's request for weapons of mass destruction, it was not enough. on august 5th our administration worked with the other permanent members of the u.n. security down kri8 to pass 2371 striking
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at the core of north korea's revenue generation. that resolution drafted by the united states embargoes all importation of north korean coal, iron, led and seafood. it now requires us to cap north korean citizens in labor. more importantly last night under ambassador haley's leadership the united states passed 2375 which now targets north korean's few areas. it restricts their ability to have over seas slave labor and it cuts off 55% of the refined petroleum products that are going into north korea and it bans those. these are central to our efforts to mobilize the community and to deny funds to kim jong-un's programs. the fact is we have been living under be the u.n. sanctions for
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a decade. it has never made a significant stride to develop a nuclear tipped icbm. the effectiveness of u.n. security council resolutions depends upon implementation and enforcement. kim jong-un has two key financial vulnerabilities which we are targeting in the treasury department. first, he needs revenue to maintain and expand his wmd and second he needs assistance to transfer them, and to pay for goods both lis sit licit and illicit. there are only finite ways they can raise money. coal shipments brought in more than $1 billion a year to the regime. north korea was making an additional 500 million or so from iron led and seafood and
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the textile ban will deny them around 800 million that they were generating in previous years. that's why these resolutions are so important. again, effective implementation of this and all of the prior u.n. security council resolutions is essential. we struck at the heart of north korea's illegal coal trade in china. treasury designated 16 designees among the largest producers. they were responsible for importing half a billion dollars worth of coal. the first was a message to north korea. we intend to deny the regime the last remaining sources of revenue unless and until it reverses course and denuclear rises. the second message was to china. we are capable of tracking the banned goods despite that.
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on june 1st we targeted a different type of north korean revenue, labor. we designated three individuals and six entities involved in that set of actions. we took actions in march. in total under this administration the treasury department has engaged in a full-court press on kim jong-un's revenue generation networks and we have singled out 37 specific entities involving the most lucrative types of trade. mr. chairman, i want to share with you today another type of evasion scheme in which north korea is engaged. as part of efforts to obtain revenue, they conceal the true origin of goods. pyongyang falsifies the identity of ves siels to see where it is. for instance, in june we designated dalian global unity, a chinese company that apparently was transferring about 700,000 tons of freight
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annually between china and north korea. i'm pleased to arrive at the committee, exposures of these duplicitive actions. vessels originate in china and they turn off their trans ponders as they move and they keep those trans ponders off and they turn them on as they round the south korean peninsula and they head into a port. they sat in the russian port for a period of time and headed back out to water ultimately docking back in china with north korean coal. sanctions evasion. the second slide which we'll show now is yet another example. in this particular sample you have a ves sill that pulled its
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vessel off. docked in russia, offloaded the north korean coal. another vessel -- that one was panamanian, that was from jamaican flag, and again to circumvent you in sanctions. mr. chairman, the other prong of our effort is to close in on the way north korea accesses the financial system. it is difficult for north korean individuals and entities to do business in their true names and so that is why they maintain representatives abroad who are engaged in all manner of on few skags of creation of shell and front companies. in fact, i dealt with many of these entities when i served in the private sector to help conceal north korea's over seas footprint. these individuals are crucial to the north korean regime because they have the expertise needed to establish front companies, open bank accounts and conduct transactions to move and launder
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funds. it is incumbent upon the financial services industry, both here and abroad, to stay vigilant, and i urge those who might be implicated in the establishment or shelf -- shell or front companies for the dprk or anyone who's aware of such information to come forward with that information before now before they are swept up in our net. we are closing in. we've already designated several bank and trading operatives in china, cuba, russia, and vietnam and we're closely coordinating with the department of justice and others to targ funds. the chairman mentioned our actions against the bank of dangdong. we have designated that bank and found it to be of a primary money laundering term. i recognize that i'm over time with the committee and therefore i will wrap up my comments.
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suffice to say, our actions -- this was the first treasury department action in over a decade that targeted a nonkorean, nonnorth korean bank for the activity. it demonstrates our commitment to take action. we look forward to taking action with the chinese where possible. we will nevertheless move forward to safeguard the u.s. and international financial system. thank you, chairman. >> assistant secretary billingsly, thank you very much. let me make a point. in terms of when we've seen sanctions that were effective, in 2005 we had sanctions on a bank. in talking to a senior official it worked in the missile program. he indicated because we had cut off the hard currency they had to shut down their icbm program. one of the things he indicated also or was indicated by the conversations we had with senior
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defectors was that during that time the ability of the regime or the dictator, as they called him, to get his hands on hard currency was blocked and the inability of a dictator to be able to pay his generals is a quote, is a very bad position for a dictator to be in. in retrospect, we therefore see two things happened during that period of time in terms of the desperation of the situation within the kim regime. this was under his father, kim jong-il. we have the ability to replicate that if we have the will to do what was done in 2005, and in 2005 it was maybe a dozen banks that were being used. at that time treasury count found that north korea was counterfeiting $100 u.s. bills and that gave treasury the authority to do this until such
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time as the department of state forced them to lift the asset freezes. but during that time we had an enormous amount of pressure being brought to bear. in this particular case -- and let me use your words here, but it is china that is primarily involved in the support sis them terms of i estimate 90% of the hard currency that the regime needs. you said if china wishes to avoid future measures such as those imposed onback of dangdong or various companies, then it
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urgently needs to take public steps to eliminate financial trade and access. that's the point to us here in congress. some of congress's -- of our opinion on this in congress is affected by the fact that china's biggest banks, even state-owned banks still do business with north korea. that's got to end completely. we cannot accept half measures on this. these transactions are what supports the regime's nuclear program. and i understand the administration is pressing beijing to take action here. i understand that many of these banks have significant operations in the united states and that there would be consequences to our economy, however, these banks' u.s. presence is the very thing that makes our sanctions so powerful. they'd rather do business with us than north korea in terms of
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how consequential that is to these institutions. so at what point do we designate these major chinese banks for doing business with north korea? we've done our outreach to beijing with limited results. shouldn't we demonstrate the seriousness with which we take the north korean nuclear threat while further isolating that regime in north korean, kim jong-un from the financial system that he uses to build out his atomic weapons program. >> chairman, first let me say that china and russia are to be recognized for supporting the adoption of the two most recent u.n. security council resolutions, which are significant for the clamp down that they enable us to place on kim jong-un's revenue. however, we've been very clear that if china wishes to avoid
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further measures such as that which happened to the bank of dangdong, we need to see that. i cannot say i've seen that. we need to see that happen. >> well -- and let me just -- to both our assistant secretaries say this. last night we saw the security council unanimously approve its third u.n. sanctions resolution this year on north korea, and this latest measure restricts the regime's oil imports while banning textile exports and joint ventures, however, the nature of the security council means that this was a compromise. to ensure the regime cannot claim this compromise that came out of this as a victory, which
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is what they'll try to do, we have got to demonstrate the impact of these new international sanctions by making certain that this time no one's skirting those sanctions. so what steps will the departments of state and treasury take in the coming days to implement the new security council resolution? and how will these actions that you're about to take send this clear message to kim jong-un on the reality that this time we are going to follow through with enforcement and give them no space in terms of additional hard currency? >> thank you, mr. chairman. it's very clear in the process of ramping up this peaceful pressure campaign on the north korean regime that one of the key elements is to keep the global coalition that we've got behind these sanctions together
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and to keep every single country in the coalition working actively to continue to squeeze on trade, on labor, on financial transactions, on shipping, et cetera. and what we've been doing in the department of state is working across the board with every one of our diplomatic partners around the world. the secretary raises the north korea issue in every single one of his meetings with foreign leaders, and we have seen a great response from countries around the world who are increasingly outraged over north korea's provocative behavior. so we have really been working hard to close the net. we've seen, you know, diplomatic establishments closed, ambassadors kicked out, other north korean representatives kicked out, all kinds of -- you know, the philippines announced recently they're going to cut completely trade with north korea. so we are having an effect on a lot of the networks that the
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north koreans have built around the world. i think the sanctions, 2371 last month and now 2375 last night, we are going to be working aggressively to make sure that we and all of our partners around the world are going to be working with every country that we can to make sure that every country has the ability to track illicit transactions, to go after violators and raising consciousness without both giving them the tools to go after those bad actors is what we're -- is what we're focussed on. we're trying to clean up ship registries and give countries the ability to track better the shipping of ships that are flagged under their flag, et cetera. so i think we're still working on implementing these most recent two u.n. security council resolutions. we have an ongoing very close dialogue with the chinese on what they're doing to track sanctions and we share a lot of information with them, but we will also drive them to shut down networks that we find.
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>> thank you, assistant secretary thornton. my time is expired. i'm going to go to mr. engel for his questions. >> thank you, mr. chairman. you know, when i was in north korea, and this is a while back, but twice, one of the things that struck me, we had just deposed saddam hussein, and one of the top north korean officials, it wasn't the leader but it was very, very high ranking official said to us, saddam hussein didn't have nuclear weapons and look where he is now. from that whole two trips i took, that's the one thing that rang in my ears. and now, of course, they're carrying out those -- those horrific words. let me -- secretary thornton,
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let me ask you. in europe we have nato, obviously. in asia we don't have a treaty group like nato, so how do we assure, in your view, our allies who doubt our resolve to defend tokyo or seoul because we're afraid of what might happen in los angeles or guam or any other place? how do we -- how do we reassure them, our allies? >> thank you. thank you, mr. ranking member. i think we have been working very, very closely with both south korea and japan but also with all the other countries in the asia pacific region on confronting the north korea challenge. we work -- obviously we have a very close and continuing conversation with both japan and
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korea, not just the state department but the department of defense on managing our alliances. obviously we've been talking to both japan and korea as the chairman mentioned about additional defensive needs and capabilities that they may have that they want to move ahead on and so i think the reassurance that we've been providing them with and the constant close communication with them and with others in the region has been of significant reassurance to them about our ongoing commitment to the defense of our allies. >> thank you very much. secretary billingsly, can the u.s. and could you identify the top, say, 25 firms that compose north korea's illicit network? and if so, would you be willing to provide that information to this committee in classified form if necessary?
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>> ranking member, yes, we would be pleased to have a classified discussion with you on the -- a number of north korean entities that we are actively targeting, however, once we choose to move with designations and blocking of assets and so forth, we would want to keep that kind of information very close hold until we're ready to move so that the money doesn't flee in advance of our actions. >> okay. i think there would be interested in this committee for such a gathering so we'll be in touch with you. we'll do it together, the chairman and i. let me ask you about these entities. if beijing and the other relevant governments haven't taken sufficient action to close these entities and curb their activities, have we taken action to designate these entities
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under u.s. law? >> yes, sir, we have. we've done a couple of waves of that under this administration. our august 22nd actions that i referenced were probablynd acti referenced were probably the most noteworthy and definitely a signal of things to come. >> have we informed beijing, these entities -- it's my understanding these entities operate in china and other jurisdictions. have we informed beijing of the activities of these entities and communicated expectation of u.s. government that their action be curb curbed? >> yes, sir. both department of treasury and department of state in repeated communications with our counterparts in china, often very specifically with respect to entities we believe are associated with north korean regime and we make very specific requests for action on these
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entiti entities. >> thank you. look, this is a problem that goes back to a number of administrations before this one. the president did inherit a complex and intractable foreign policy problem in north korea. his mix and inconsistent messaging is self-inflicted. this is a self-inflicted wound. again, i don't see the purpose of arguing with south korea on trade at a time when we need to show strong and resolve. so let me ask you this -- i have so many questions to ask, i can never get them in in a short period of time. let me go back to you, secretary billingsley. the chairman mentioned several large chinese banks in his remark, china merchants bank was
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one of them. have we taken action against them? if we haven't, why haven't we? >> so congressman, we have taken action against bank of dan dong, which we think is a money laundering concern associated with north korea. our action vs had a very clear effect on that bank's operation s. that's our intent moving forward with expunging. we think a very important thing to do here is to very specifically target and impose those facilitators for the north korean regime who set up elaborate shell company structures that are then used to get the bank accounts to launder
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the money. that is a priority focus area for us and we are driving quickly forward on that matter. >> thank you. secretary thornton, did you want to add something? >> i want to note for the committee the chinese have announced in the last couple of days measures against all of their big banks operating particularly in china, warnings and prohibitions about opening accounts for north korean actors so they are actually feeling some pressure on this and making public statements. >> one quick thing, you both would agree any kind of resolution or partial resolution of this crisis has to go through china. it's virtually impossible to not involve china. china i think, we all think, is the one country that can influence north korean behavior. do you agree with that?
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>> i do. >> okay, thank you. thank you, mr. chairman. >> mr. engel. we go to chris smith whose subcommittee leads our work on human rights. >> thank you very much, the leadership, for putting together this important hearing. painstakingly working the details of this. it's an extremely difficult fight, and i want to thank you for what you're doing every day to make a difference. i want to express my deepest respect to ambassador haley and the administration for drafting resolution 2375 as you have pointed out, the toughest anxio sanctions made it out ever against south korea. my hope is they will comply with the conditions. you might want to speak to your expectations about that. obviously in the past it's been lackluster in many ways. i would also appreciate your thoughts on how you judge
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success or failure of strategic patience and whether or not you thought that aided and got us to where it was now or inevitable anyway. for many there is a significant and i think profound significant underappreciation for the dictatorship cult, kim il-sung. i read books about it. refugees who speak -- they say, you americans don't get it. the worship of kim il-sung is so profound, so deeply embedded and it does lead to a fanaticism that rivals isis-like fanaticism what they would do for their leader going back and now current leader. i think if we underappreciate that, do you think a information
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surge, nothing to stop broadcasting capabilities they have to demystify the kims, because the big lie has been embedded in the hearts and minds of so many north koreans for so long. every time i talk to a group of defectors and i ask them that question they wax eloquent about how from youngest age right up and those expressions when one of the leaders died and the tears and people throwing themselves on the ground, it's not fake. it's fanaticism. when it comes to military, it will be carried out with who aric consequences for those defending liberty in south korea and elsewhere. finally we know that china subsidizes north korea's bad behavior. it enables torture of asylum seekers by repatriating those who escape to china. provides kim jong-un needed
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currency by employing thousands of trafficked workers. i'm wondering if looking at with regard to china global magnitsky sanctions against those and other crimes. u.n. commission on inquiry for north korea recommended sanction be used to target individuals. we've got the law. i hope that's something that is under active consideration and hopefully will hear soon about individuals being so targeted. >> yeah. thank you very much. of course the u.s. state department has been very concerned about the egregious human rights situation in north korea for decades. we've had a special representative working on these issues. we've worked closely with him. i think we've made some good progress or at least we've taken a number of very significant actions in this area and will
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continue to do so. i think the question of increasing information access inside north korea is one that we certainly have looked at and are working on. whether we can do more there, i think we're always looking at what we can do more and more effectively. i think from my standpoint one of the biggest ways we can get people inside north korea to question what the regime is doing is by making it very difficult for them to pay the military and to provide for their citizens. i think that's really what we're focused on in addition to knock down proliferation networks contributing to the weapons program. so there's a litany of egregious behavior across the board and we want to go after every single aspect of that. i think looking at cutting off the economic flows to north korea is another way -- >> of course that would include the complicit of tehran, iran
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with ballistic missile program in north korea. >> sorry. i didn't get the connection. >> the cooperation between iranians and pyongyang when it doss ballistic missiles, it's something that i and others ask questions, when the iran deal was being contemplated, and unfortunately that was left off the table in the final agreement, the concern is that cooperation continues today. i hope that's something that's very aggressively being pursued as well. >> we're certainly looking at that. >> you want to speak. >> first of all, congressman, i had your leadership on human rights matters for quite a long time. aid chance to work for you when i was a staffer on senate foreign relations committee in 1990s under chairman helms under those days. again, appreciate the stand you take on these matters. we are very specifically looking
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at a number of individuals engaged in egregious, outrageous human rights abuses. this matter you've articulated exactly correctly. however, i'm not sure the cult of personality necessarily extends to all around the dear leader. he very much i think depends upon this hard currency as the chairman is noted to have his opulent lifestyle and those around him. the extent to which draining his ability to generate hard currency not only restricts his ability to engage in wmd and mitchell program but increases the fragility of the regime around him. this is as we would say a twofer in our view. >> soon north korea will have more nuclear weapons than they feel is absolutely necessary to defend themselves from us, but
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they will need hard currency. they might prefer actual cash currency. iran is having constraints on its ability to develop nuclear weapons. mr. secretary, do we have any understanding with china that nonstop flights between pyongyang and tehran will be forced to stop for feeling or do we have anything else for this obvious deal. >> i'll defer on flights in and from north korea. i would also, congressman, note as we move forward -- >> i have very limited time. do we have anything or not? >> i know we have limitations on air refueling. i know the chinese have refused
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to refuel so there is pressure -- >> i'm not asking -- i'm saying do we have any understanding with china there will be nonstop, no refueling planes going from tehran to pyongyang loaded with currency or coming back with a nuclear weapon? >> no, we don't. >> we don't. so we have one country that has over a billion dollars in seran wrabd currency and another country if done well will need a million dollars of currency and will have quite a number of nuclear weapons they can sell. folks, i've been coming to this room for 20 years. not much has changed. we've got ileana spilg down upon us. that's good. we've got some electronics. for 20 years administrations have been coming here and telling me that we do not have
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to make any concessions to north korea. we don't have to do anything that would make any single american company upset, and we're going to make the american people safe. for 20 years i've been hearing that over and over again. i hear we're going to have unprecedented sanctions. we found a few more companies to sanction, just as they have invent add few more companies and created them. whether we can list them as fast as they can create them, i don't know. the fact is north korea's real gdp has grown 50% in the last 20 years. assistant secretary, if you were successful in -- with your sanctions, you might just cause them not to increase their gdp, which means they still have 50% more than they found necessary to hold onto power back in 1997.
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but while we haven't made the american people safer, we've met the political objectives here in the united states. we don't threat en china even a little bit with country sanctions because that would be politically difficult for the united states to do. we don't don't reasonable objectives, like a freeze in the north korean program, because that would be political difficult to do. what we do is what we've been doing for 20 years. we've heard. chairman royce has always come up with this or that, better sanctions, sometimes his ideas are listened to, sometimes they are not. there's never enough pressure on the north korean regime to cause regime threatening levels. this is a regime that survived the famines in the 1990s, late 1990s. now their gdp is 50% higher than it has been. it's gone up just about every year.
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china is not going to allow us to put regime threatening pressure on the north korean regime. they may put -- punish them a little bit for what they are doing and how they are doing it and how disruptive they are and how headline grabbing they are, but mr. assistant secretary, do we even have a plan for threatening china with country sanctions, tariffs on all goods? or is it a matter number seven bank won't be able to do business in the us, number eight bank and number one through five banks will. if you were running a retail, would you think there was slightest risk of your supply chain to china because of china's unwillingness to engage in the kinds of sanction necessary just to get a freeze of the nuclear program? >> congressman, i think you
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raise a good point. china is central to this program. >> we are not doing enough to force them to change their behavior, which is to punish north korea a little bit for being a little too flamboyant in their actions but make sure the regime can survive. this regime won't even agree to a freeze of their nuclear program unless you have something relatively -- at least halfway towards threatening sanctions. >> i'm not sure i agree with that? >> you think the regime would give up its nuclear program even if they said, well, we can survive these sanctions. we care so much about our people that we're going -- we care about our gdp -- >> i wouldn't speculate on regime thought processes, i would focus on nine he's being center of gravity here. i know from a tempo standpoint,
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the pace of action we have taken -- >> it's unprecedented just like the last 19 years people have sat in that chair and told me it's unprecedented but it's certainly been enough to stop. >> will the gentleman yield? >> i will yield. >> i think the gentleman is raising exactly the bottom line question here. in other words, we're deferential here to a point. but it's been a lopping time since '94 framework agreement with north korea. it's been a long, long time of waiting for china to comply with the sanctions we pass and frankly with the sanctions that the united nations passed. as you've laid out for us with the charts you provided, china understands that that coal is coming, circumventing the sanctions and being unloaded just as they understand that these banks are not complying with the provisions that are
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passed by the security council. i think mr. sherman raises a point. i've only seen once in 2005, in response, as i said, to north korea counterfeiting our currency and that power was soon taken away from the treasury that i ever saw anything that cut off hard currency into the regime, and that was because we didn't give anyone an option anywhere. if you were doing business, we were shutting down those institutions. so i would just say, this is where the discussion needs to go next, if there isn't full compliance with the sanctions that the u.n. have passed, because what's at risk is our national security. there's only one way to shut a program down with a country like north korea that doesn't have its own revenues.
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i thank the gentleman from california for raising the point and i yield back to him. >> i'll just say for 20 years we talked about company sanctions instead of country sanctions. for 20 years, china has carried out a policy where they smile at us but they have done enough with north korea so their gdp is 50% higher in real terms. that's much better economic growth than we've achieved. so the sanctions have been -- have not prevented a high-level of economic growth. my guess is that we will continue the policies that we have in the past perhaps at a louder volume. and i would finally.out in terms of how small the north korean economy is, how difficult it is to squeeze. yes, we're trying to go after their oil, but they use about
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the same amount of oil as 150 gas stations total. whole country. that's less than there are on ventura boulevard. of course they can liquefy their coal and use that in lieu of oil. it's going to be tough to put this regime under enough pressure to even get a freeze. the idea we would ever get this regime, having seen saddam, gaddafi to actually give up their nuclear weapons, i yield back. >> mgo to chairman of eurasia committee. >> thank you for roaring leadership on this committee to be dealing with issues of this magnitude. thank you very much for your responsible leadership. >> mr. rohrabacher. >> i share my colleague's
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frustration and scepticism that was just expressed. my father was a korean war veteran. i would hope the very last thing that is on everybody's mind is to try to exercise more influence by putting more american troops in south korea. that is not the path to a solution to this problem. so what are the solutions? obviously we're being told even from everything you're saying in terms of economic sanctions, i agree with mr. sherman. i'm very skeptical any of that is going to have impact. i remember being here and sitting a little bit over there at the time when president clinton proposed and passed through this congress a plan that would give north koreans billions of dollars of american
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assistance. of course we did that with iranians. -- what is the solution? first of all, what's the challenge. am i mistaken that i have heard quotes from the official head of the north korean government threatening to rain mass destruction of some kind upon the united states? has he actually made threats to in some way kill millions of americans with a nuclear attack? i can't hear you. >> i don't know if he's said those specific words but there's been a litany of threats
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including at guam, including videos showing bombs raining on american cities. >> so he has made it clear there he's willing as the leader of that country to murder millions of americans with technology. let me note, then, that i would hope while we do not consider putting u.s. troops in south korea a solution, i would hope that we would be willing to use force, which is something that nobody wants to mention. i think this is perhaps the only thing people like that understand. so i would suggest i won't ask what type of force has been ruled out. i'm sure the administration has got the parameters of what type of force they are willing to use. but i would certainly think that the use of defensive forces -- and again, thank you ronald
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reagan for insisting we have anti-missile systems available. i would hope the next time north koreans launch a rocket, especially one that will traverse over our ally japan, i would hope that we shoot it down as a message to the north koreans and to other people in japan who are counting on us. unless we demonstrate we're willing to use force, there's no reason for them to believe we wi will. also, not only anti-missile defense type of approach, but i would that if, indeed, another missile is launched, that we -- or they are preparing for a launch, that we conduct a cyber attack on north korea. yes, it is a very small economy
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and a small country. a cyber attack against that type of threat should be effective, but it is a use of force without major loss of life, which is what ronald reagan talked about all the time. we don't want to be in a position where our alternative is murdering millions of people who are basically the victims themselves of a totalitarian regime. so i won't ask what parameters we have in the use of force, but let me just note i don't believe that sanctions alone will have an impact on tyrants that murder their own family and have been so abusive and murderous to their own people. i don't believe pig them off as president clinton tried to do, now we are stuck with this. down the road from that deal, we
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now have this. those billions of dollars of assistance we gave north korea, i would imagine provided them other money that they could put into developing their own nuclear weapons system. so with that said, good luck to you all. thank you very much. thank you to our leadership and this committee. we're all americans in this. let's hope for the best but prepare for the worst. >> thank you, mr. rourhrabacher we now go to mr. connelly of virginia. >> thank you, mr. chairman and welcome. we talk a lot about bipartisan, and we want bipartisan on this committee and in our foreign policy. we don't get bipartisanship when we ignore history, or when we whitewash statements and actions of the current president with respect to north korea. we have a model that works.
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of course a lot of people on this committee didn't support it. that's called jcpa, iran nuclear agreement. they have met the metrics. recently the united nations certified they are complying. it rolled back a nuclear program. it involved cooperation not just with our allies but with our adversaries, russia and china, and it had iran at the table. to what end is u.s. policy? what i didn't hear from my friends on the other side of the aisle, including the chairman in his opening statement, a powerful opening statement, i support tougher sanctions. always have. but it's one part of a policy not the whole policy. as the iran experience demonstrated, there has to be some reward for compliance and cooperation at the end of the day or you're left with a policy only of talking loudly and
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carrying a stick. we haven't talked about the fact that the ranking member did, the president of the united states in the midst of this crisis threaten our ally, the most vulnerable party to north korea's action, south korea, with abrogation of a free trade agreement we worked so hard to get. he accused the new south korean president of appeasement. he threatened to cut off trade with any country that trades with north korea. that list is 80, including allies like india and germany, portugal, france, thailand, the philippines. are we, in fact, going to cut off economic relations or trade with nations? it's an empty threat. he talked about our response by the united states of fire and fury. frankly the policy looks more like fecklessness and failure.
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miss thornton, is it the policy of the united states government to abrogate the pretrade agreement with south korea? has anyone at the state department looked at the negative consequences of such an action especially at this time? >> thank you, mr. connolly. we are currently undergoing rigorous review of all the provisions. the united states trade representative recently held -- >> my question. i'm sorry. i'm limited in time. forgive me. my question is direct. is it position of the state department abrogating the agreement with south korea would be helpful in our diplomatic efforts and in our efforts to respond to north korea at this time? >> no. i think what we'd like to do is work the trade agreement at the
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same time -- >> is it the policy of the state department that the new president, president moon of south korea, is engaged in a policy of appeasement in any respect to the north? >> no. i think we've been working hard to get south koreans to come around and be on the same page as we and the rest of our allies. they have come around very nicely, i think. >> thank you. mr. billingsley, like you, i also served on senate foreign relations and worked with your former boss. i was on the other side of the aisle but we actually made a lot of music together at times, which always surprised the reagan administration and bush administration afterwards. you talked a lot about china. so china has been violating, you provided evidence of that, violating sanctions under other flags, shipping coal, providing badly needed foreign exchange for the north korean regime.
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they just signed on in this unanimous u.n. new round of sanctions. do we have any reason to believe that that would signal a change in chinese behavior for the better? or is it another empty promise that will be violated with impunity. >> to be determined. >> can you speak louder into your microphone. >> it's to be determined. the reason i wanted to highlight for you evasion schemes maritime enforcement now becomes crucial. with the two u.n. security council resolutions in effect, not sanctioning but embargoes, kpre complete embargo on paper of coal, iron, led, seafood, gasoline, maritime enforcement of those u.n. security council resolutions, which are binding on all members of the u.n., that's going to be crucial going forward. >> the chair would indulge me just one follow-up question. so at the end of the day,
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either-or both of you can answer, so let's say we by tightening sanction, which i favor, we get north korea to the table saying uncle, what do we give them in return? what are reprepared to do to entice north korea that there's a pile of something at the end of the rainbow if you freeze the program and start to reverse it under international observation. is this the goal. >> i think the secretary of state has been clear in public remarks that we would look at public enticements, development opportunities for their economy, their security concerns and other things we've talked about in the past. all of that on the table. we don't want to pay for negotiations or negotiate to get
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to the negotiating table. that's where we are right now. >> at the end of the day, i give you one word that has to guide u.s. foreign policy in all respects but especially north korea, efficacy, defined as ability to produce a desired and intended result. that's also to be determined, mr. billingsley. thank you, mr. chairman, for your indulgence. >> thank you mr. connolly we go to steve shabbat of ohio. >> thank you, mr. chairman. i want to thank you and the ranking member, as others have said, for your at least attempts to get sanctions or tougher sanctions, something worthwhile to pursue. that being said, one thing to make sure i'm accurate on this. 90% perhaps more north korea and regime survives, one source from china. i'm seeing a nodding.
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would you agree with that also? that being said obviously china is key, has been for a long time. seems to me there are two things that could get china's attention. they have given us lip service for decades now. one of those things is the trade with u.s. significant -- some sanctions with banks may help a little bit. it's not going to have the result we want. that's to avoid backing off this march to madness in the nuclear program. one way is if we did cut off trade. of course if we did that it would have an adverse impact on american economy. however, i think that pales in comparison for the impact on american economy if we see a thermonuclear device go off in seattle or san francisco or l.a.
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or new york or washington. so that's one thing that could get china's attention. i think the other thing, you sort of may have been thinking about this when you say we're deciding with japan and south korea what they may want to move ahead on. i don't know if this is what you have in mind or not but it's what i have in mind and said for yea years, they do not want japan or north korea to have their own nuclear programs. i have thought for a long time we should be discussing that with them. i think the discussions alone could have gotten their attention to get them to put pressure on north korea to back off. it may be too late for that now, but could you comment on those two items which perhaps could
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get china to actually put sufficient pressure on north korea to back away from this madness. >> sure. i think we are certainly looking at every option to put more pressure on china. we're using all our global partners to speak up and from their perspective put pressure on china because we do see china as key to the solution of this problem if we can get there. i think for cutting off trade that would be a huge step and there are a lot of ramifications of that. i think going after entities of baepgs are banks are more directly after the north korean angle here. i agree with you trade is preferable to seeing any kind of military confrontation, especially one that would involve people in the united states. on the issue of defenses in japan and south korea, we've certainly been talking to japan
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and south korea about beefing up defenses and themselves take action in the event of an attack. even those discussions have gotten chinese attention. as you know chinese have been vocal to the opposition of thaad deployment in south korea which we have moved ahead on now and gone ahead and deployed over and above their objections. we have made clear the japanese are seeking additional defensive systems to enable them to ward off an attack on north korea. it is quite clear i think already to the chinese that this is an area that is going to be further developed if we can't rein in the threat from north korea. >> it's my view short of one of those two actions, i think we're going to continue down this path where kim jong-un will continue to move forward on this nuclear program. that will leave only the option, the military option, which there's no good to come from
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that. we know if betake that action they could target seoul and lives could be lost, american lives. it could come to that. or the alternative some people are suggesting now as well, we have a nuclear china, we have a nuclear russia. we don't like that, so maybe we end up with nuclear north korea. why can we not allow that to happen. how are they different? >> a lot of times people talk about north koreans needing a nuclear program for their own defense. the fact of the matter is that there's been basically a mutual deterrence in effect since the end of the korean war. they have a conventional position that allows them to target seoul. so the idea they need nuclear weapons for their own defense when there's never been retaliation for any of their provocative or hostile or
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eastbound kinetic actions they have taken is a bit of a bridge too far, i think. so the concern is that they are pursuing a nuclear program in order to use that program to conduct blackmail and hold other countries hostage and continue to take even worse sorts of steps in their behavior. proliferation is another major concern, of course. it undermines the entire global nonproliferation system and would be, we presume, ripe for sale and sort of proliferation around the world. so i think two major angles there. >> thank you. my time is expired. >> mr. dav-- rhode island. >> you said we will never accept north korea as a nuclear state. what did you mean by that?
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aren't they already a nuclear state? >> no, we don't recognize them as a nuclear state. >> what does that mean? >> we do not recognize them as a nuclear weapons state. we don't recognize their program and we won't consider them to have nuclear weapons. we're considering denuclearization. >> the fact we don't consider -- we can't imagine it away. either they are a nuclear state or they are not. the recognition of one, i'm not understanding that point. i mean, we have to have realistic context before we shape -- >> will the gentleman yield for a second? there is an additional complexity here. >> about delivery. >> i wanted to make that point. >> i understand. let me move on. mr. secretary, you said that u.n. resolution 2371 prevents 55% of refined petroleum
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products from coming into north korea and new sanctions prevent half billion dollars of coal, which leaves another half billion dollars of coal and 45% of -- am i understanding our sanctions don't reach the balance of that? if not, why not? >> congressman, a couple of things. so all coal is prohibited to be transacted. that was under the prior -- >> mr. secretary, just pull the microphone a little closer. >> congressman, it is not allowed to trade in north korean coal, period. nor in iron, iron ore, lead ore. >> this is percentages relate to noncompliance. >> the 55% number i gave you is kind of the fuzzy math done on how much gasoline versus crude oil is imported today into north korea from china. >> okay. thank you. i think we've heard from a number of my colleagues in response to those questions
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about pretty clear noncompliance by the chinese. the u.n. experts on north korea in february found they were using this livelihood exemption to trade banned goods and allow companies to send rocket components to north korea. you said, miss thornton, also mr. secretary, we need to see that happen. that is compliance by the chinese. you described the chinese as center of gravity. miss thornton you said if they don't comply with sanctions we will use the tools at our disposal. what are those tools, and why aren't we already using them? otherwise these sanctions sound good in a press release, but if they are not actually honored by the parties they are not effective as mr. connolly said. what are the tools you intend to use and why aren't we using them. >> west nile of the things that's important to remember, assistant secretary mentioned this, north korea has been under sanctions for many decades. their networks -- it's a
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criminal enterprise, their networks are deeply embedded and they have designed them to escape detection. so it is a little bit complicated to go after these things. what i meant when i said tools we have international sanctions regions, international community signed up to it and is obliged to enforce that. we have a running discussion with many countries around the world on information we have about what we find is illicit networks and ask them to go after those. if they don't, we will use our domestic authorities to sanction those entities. >> i guess my question is, i think most military experts would acknowledge there is not a good military option. we can talk about it but there actually isn't one. so if we surrender the use of the sanctions regime to produce the result that we want by not using every tool that's available to us, aren't we in the end acquiescing to north korea's nuclear capabilities. >> i think our strategy is to ramp up the sanctions regime,
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and that's exactly what we've been doing. we've had two u.n. security council resolutions in two months. that's unprecedented. >> i understand. but they have to be implemented in a meaningful way and fully. otherwise they are nice resolutions but sends the wrong message to north korea if they don't see that's real engagement by the chinese to make these sanctions work. >> that's exactly what we're working on will i think on sanctions regimes, a lot of people say the sanctions won't work either. in past cases where we reviewed sanctions, i just want to note you're a chump if you're implementing sanctions and they are not working until you're a genius if they do. >> i think sanctions do work. the suggestion china is the center of gravity is right. the only way we'll get china to fully implement the sanctions regime is for them to conclude that it's in their own interest to do that. that will only happen when they
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arrive at the point that their fear of a unified korean peninsula aligned with the united states is out weighed by their fear of a military conflict on the korean peninsula. i think that's the calculation. i guess my question is, what are the strategies that the administration is pursuing that bring china to that point where they conclude that it is in their interest to enforce the sanctions because the danger of a conflict on the peninsula is greater than their fear of some alignment by korean peninsula with the united states. do you agree or disagree with that? >> i think that's right. i think we've seen the chinese moving in their system for them pretty swiftly toward a recalculation of what they are worried about on the korean peninsula. they see north korea's actions undermining their own security through the beefing up of defenses in their region and
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they are also seeing -- they are certainly very alarmed at north korea's behavior and the explosion of the six nuclear tests, a hydrogen bomb right on their border is very concerning to them. so i think we see them moving in this direction. it's not fast enough or deep if you have for us to be satisfied but we're certainly pushing them in that direction. we have an ongoing conversation with them about this at the highest levels. >> i would also add that as the chairman has pointed out, the bank of delta asia sanctions had a crippling effect on the regime but that was more than a decade ago. we have for the first time in more than a decade taken action against in this case a chinese bank. this was bang of dandong. that was a clear warning shot
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chinese understood. we are in repeated discussion wall street them we cannot accept did international financial system by north koreans through their financial networks. >> thank you, mr. chairman, i yield back. >> mchairman of our asia-pacifi subcommittee and he joined us in south korea and has passed legislation to improve our ability to get into north korea. >> thank you, mr. chairman. north korea's provocative launching ballistic missile over japan and detonating most powerful nuclear device to date the kim jong-un trls is more bold than before. he said backed into a corner. he's wrong. he's getting into a decreasing
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corner by his actions and we're on the outside of that corner looking in. year after year successive administrations have failed to fully implement the sanctions and china continues underwriting the programs either financially via trade, doing 90% of their trade, or through technological exchanges as we've seen with the rocket. north korea launched up and we recovered -- not we but the south koreans recovered a second stage and it was full of chinese components. so china is complicit in this. the implementation of the secondary sanctions authorized by congress has established -- as established that we've done over the past years is often controversial. but north korea's nuclear technology has advanced, the need has become imminent. with these recent tests, implementation has become existential need for millions of north koreans, japanese
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civilians, perhaps united states and really the world community. i find myself agreeing with the colleague mr. sherman again when he was talking about china. we've been here multiple times. his experience of 20 years in the committee hearing the same story over and over again. my questions are focused on what do we do from this point forward? you two are in the seat you're watching this at a very close level of engagement. you know what is working, what is not working? how do we go forward we're not back here discussing in a year discussing what we should have done. i want to know what we did do and what tools move forward so these sanctions really do work. ranking member sherman and i wrote a letter providing north korean banks with indirect correspondence. i'm happy to say the state department have sanctioned recently and china has been complicit with this and gone along with this. agriculture bank of china and
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the china construction bank. these are great positive moves but there are still ten more banks that china can sanction or put pressure on to stop doing business with north korea. my question to you, do you guys have enough tools in your arsenal to make sure that the world community, because it can't be just us. that's why sanctions haven't worked in the past. it has to be a buy in from the world community because this is something that's affecting all of the world community to get to a point where we have diplomacy that works, so we don't have any kinetic conflicts. certainly this world does not want to see a nuclear device go off in a homeland of anybody's. this is this generation's fight to make sure this doesn't happen. so miss thornton, is there anything that you need that would make these other countries complicit with the sanctions? >> thank you very much, mr.
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subcommittee chairman. we definitely believe that the u.n. security council actions are the most significant actions we can take on the sanctions front. that's because every country in the world is obligated to enforce those sanctions. it gives them the legal authority to do so and obliges them to do so and opens up a whole sphere of enforcement for us to work with other countries on. i think the most significant actions in the u.n., which tune security council our representative ambassador haley has undertaken are really key. the other key authorities are our domestic enforcement authorities which back up u.n. security council. >> let me stop you there and ask this. north korea was on state sponsored terrorism. we can look at acts. in fact, you said that north
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korea was using intimidations -- acts of intimidation. the words you used described terrorism. so when we took them off the state sponsor of terrorism list, do you feel it would be important to put them back on that? would it help toughen the sanctions and get compliance by the other countries? >> i think state sponsor of terrorism is another statutory tool we have. certainly the secretary is looking at that in the context of north korea. >> i'm about out of time. would it be prudent to put them on the list. >> i don't know additional authorities there that would give us additional tools to go after things. i think it would be just another layer. >> another layer would be good. i appreciate your time. i'm sorry i didn't get to you, assistant secretary. i yield back. thank you, mr. chairman. >> thank you mr. yoho. we go to mr. brad schneider,
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also in delegateses with meetings with president moon and other senior and u.s. and zikaan officials during the time when the north kor south korean and's during the time when the missiles were shot over japan. >> it was an extraordinary opportunity to understand the situation better, to understand the threat. but also talk about the strategy. we've talked bought accelerat g accelerating, putting miniaturized on a missile. we talked about u.s. strategy, working with our laws as well as united nations. strategies follow goals. we have had some discussion of our goals, if i could summarize our goals, it seems to be where priority number one is to eliminate the nuclear threat by north korea. secondary goal is to bring
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stability to the peninsula. you talked about what our goals are not. i just want to emphasize those. not regime collapse or send troops north of military demarkation line. no desire to inflict harmon long suffering north korean people who we view as distinct from the hostile regime in pyongyang. i think that's important. what i'd like to ask you is if you could succinctly describe what are north korea's goals? >> i think is pretty hard to get inside the mind of the north korean leader, but i think he's been fairly clear in public statements that he seeks to complete his nuclear weapons program in order to be able to sit down at the table with us as a sort of nuclear weapons fully developed state.
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>> that seems part of the strategy but their long-term goals, mr. deputy secretary. >> i really do have to defer to the state department on this. my job is to drag them to the table through economic pressure but i defer to state department on this. >> i think that most experts on korea would say that the main overarching goal, and i think one of the members mentioned the philosophy, representative smith, regime survival, regime perpetuation is pretty much an overarching purpose and goal. >> that seems to be the shared collective wisdom. how about china, they have different goals than ours in many ways. how would you describe their goals in this dynamic? >> china has also been pretty clear in their public comments. they don't want chaos, war, or nukes on the korean peninsula. those are their stated three
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main goals in this particular issue. of course they are also looking to maintain stability in our region and to create conditions for further economic development. >> so it's seems there's this shared perspective at least between the u.s. and china that achieving each of our respective goals denuclearization, elimination of nuclear threat, we should have -- sanctions are the path to put pressure on korea but how do we create -- this is a broad message beyond here, a clear message for north korea that the only path for survival, the only path for them to achieve their goals is through denuclearization, this they are taking the wrong path. what off ramps, what mechanisms can we provide to show them the way they are headed is a risk to their regime, a dire risk to their regime and every option being on the table. there is a different path, and that path is open to them. >> well, it's difficult to do
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this when they are shooting icbms, threatening guam, and exploding hydrogen bombs on the border of china. but i think we've been very clear in our public statements that denuclearization is the goal. we have used both words and action toss drive them in the direction we want them to go. public statements by us, public statements by many of our partners and allies in messages directly to the north korean regime but also through public messaging which the north koreans definitely are picking up on to tell them denuclearization is the only path to survival for the regime. we've been quite explicit about that we're trying to show them that through deterrence actions, sanctions actions, diplomatic actions. i think they have a different view so far but we're continuing to press on that. >> i don't mean this next question any other way than i'm asking, what i'm asking is an
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honest question. is it better to have a very clear consistent message -- you take these steps, this is what we do or is it better in your mind to leave uncertainty and perhaps having a mix of messages? >> well, i think it's good to have consistent clear messages especially for a regime like north korea that has a very opaque communication system and difficulty probably for information to reach the top leader, which is why we use public messaging in some cases so we can be sure to get it directly. but i think it's also important not to take any options off the table, so that there is sufficient motivation for them to move toward the negotiating table. >> i would share that. i'm out of time. i'll ask the question maybe for later someone else will touch on. we talked about the outside pressure and trying to get alignment with u.s. and china in
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putting pressure on north korea. but i would appreciate the opportunity for further discussion. how we create that internal pressure from within, not just making it harder for payment of the military, but for the public to understand what's really happening within north korea. and in contrast, what the opportunities are without and pursuing that different path. with that i thank you for the extra time and yield back. >> would the gentleman yield? >> yes. >> i think you make a very important point in terms of that focus, and there's another element i thought with respect to the conversations we've had. this is the second time we've talked to a senior north korean defector who said, no, they already have the ability. they are not afraid of south korean attack or north korean attack because they have got a million man army on the border and 100,000 plus missiles and all the other hardware. what the issue is for north korea is that they feel it's an
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illegitimate government in south korea that, you know, that the founding of the korean peninsula, when the japan, it s unified under the kim dynasty. and the focus of the kim regime, kim jong-un, is on getting enough nuclear weapons, hydrogen bombs, that they can turn to seoul and say, we are going to be reunified. but we're going to be doing it under the regime. i think that that is interesting information in that it comes from those who in one case was the senior head of propaganda for the regime. and if that is indeed the calculus, it really complicates things in terms of the feelings of the kim regime, but he seemed
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to indicate, both seemed to indicate that although that was the focus of the kim family, it may not necessarily be the focus of most north koreans. who would understand, who tend to understand that that drive to do that is what is costing the country its standard of living, its ability to give anyone else opportunity. it is solely in the interest of, you know, the megalomaniac currently in power. that concept is an interesting one when it is shared with us by those who are actually part of the north korean regime, but i do think we need to begin the process of hearing, of having hearings to dig deeper into this whole calculus. i think that's critically important. i couldn't agree more. and this is why i was talking about goals. if the goal is regime survival, that strategy, there's an opportunity to have one direction. if the goal is the submission of
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south korea, that's a different strategy can be the same with the nuclear weapons, but trying to create an opportunity for engagement is entirely different and much more challenging. so i think that's a critical conversation to have. >> thank you. indeed. mr. adam consistenceinger of illinois. >> i want to commend the president, frankly, for i think finally taking a tough perspective on north korea. i think being very open about this is the challenge of our generation. we know terrorism is a big issue, but this is a bigger challenge. this is an existential threat, i would say to the united states, to world order, to denuclearization of the world, to nuclear proliferation. and as far as i see it, there's a lot of folks, and whether it's here at the hearing or if you watch in the media, they all say there's no military option. they say, well, there's a military option, but not really. it's unthinkable so we'll never use it. i look at the this way.
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in order to actually achieve our objectives and we have actually accepted defeat prior to going about these objectives. we have three areas. number one is diplomacy, which we're very ramping up in a big way through economic use, through actual diplomacy, everything else. number two is missile defense, which we would obviously need in the case that we have to defend ourselves. number third is the military option. now, people that understand instruments of power and how they work and the various instruments of power that our nation has, i think have to understand that you cannot do diplomacy with an adversary without a big stick to use. whether that's military, whether that's economic, whatever, that there has to be on the table basically the unthinkable in order to make diplomacy work. so number one, diplomacy is good, but if we're ruling out a credible military option, i think it's going to be unsuccessful ultimately. the idea of missile defense is great, and we need it, but the
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reality is if we just back up and say well, as long as we build a missile defense, north korea will be allowed to have a nuclear weapon, i think that leads to massive proliferation around the world. how do you tell iran they can't have a nuclear weapon when the jcpoa is up fairly soon, when in fact you have just given north korea de facto access to a nuclear weapon? so let me just ask, i'll ask a question, mr. billingsley, to you. when people go out and they say there really is no military option, even though it is unthinkable, and by the way, the military should be used in dooms day scenarios of which i think this ranks up there with dooms day scenarios. does that strengthen diplomatic hand. does it strengthen your ability to get north korea to the table or does it weaken it? >> i think we would be exceedingly unwise to take anything off the table. i was a senate staffer up here
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on committee on the foreign relations committee when the agreed framework was negotiated, and that was designed to freeze the reactor and so on and we gave heavy fuel oil under the clinton administration, and look where we are now. so this administration has made very clear at the cabinet level and at the president himself that we're not going to kig this can down the road. we can't. he's testing advanced nuclear designs and icbms. it's a matter of time now before he mates the warhead to the missile and poses a threat not just to our allies but to us. >> let me ask you a question to follow up. as a prior administration official said, as this person wrote in an op-ed, we have to just live with a nuclear north korea. in essence, saying the prior administration was willing to live with a nuclear north korea. let me ask you a question. if we say, as long as we have missile defense, we're unwilling
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to do what's difficult for north korea. we're unwilling to engage in economic action against the chinese, push the chinese back into their territorial disputes in the south sea, it you talk about what the rest of the world will look like when we accept north korea -- if we de facto accept them, what does that do when the jcpoa runs out of time, to south korea, japan, other country's nuclear ambitions and our moral authority to enforce the nuclear nonproliferation? >> i'll defer to the state department on the broader implications, but i would tell you, we're not willing to live with a nuclear north korea. north korea has proven that they are certainly willing to share nuclear technology with all manner of prior regimes to sell capabilities. ambassador bolton had an op-ed where he pointed out it was the anniversary of a strike on a syrian facility, which was alleged to have been constructed
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with north korean support, for instance. so these are big issues. we are determined to induce the chinese to help solve this problem. >> well, let me commend you on that, and i would give you time, i'm out so i'm not ignoring you. the clock ran, but let me say, to reiterate what the secretary said, i couldn't imagine in the situation that syria is in today, which i think is tragic, and i think there's been a lack of action on our part to fix that, i couldn't imagine had they had a nuclear program, what we would be looking at today. there's a lot of concern of social instability in north korea. look, people don't like to be oppressed. they won't be oppressed, even in a place like north korea. what happens some day when that government is destabilized. these are important question, and i want to commend you and the administration and the state department for their hard work on this issue. i yield back. >> we'll go to congress woman
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norma torres of california. >> thank you once again mr. chairman for bringing this together for this very, very important and critical issue that we have here in dealing with north korea and all of the problems they have caused most recently. i think we pretty much all agree there is no magic bullet in dealing with this regime. and i think that we pretty much are in agreement that so far, all the sanctions and everything that we have done hasn't worked. so where have we gone wrong? i don't know. part of that, you know, we're trying to address here. i think that we have to be pretty realistic that this regime that we're dealing with is willing to do anything, put its people and the entire world at risk in order to achieve what they ultimately want to achieve. and that is a nuclear weapon that would come far enough to reach american citizens.
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and you know, we have been talking a lot and calling out los angeles. i represent l.a. county, san francisco. we haven't really mentioned hawaii, which is a lot closer. and our territories. another issue i think that we have neglected to address, and that is the consumer issue. we haven't really engaged consumers in a more global inclusion to deal with north korea. and china's appetite to have slave type workers working in their companies. so as a consumer, when i'm buying products, where is that chain of where this product was made, and who it was made by? we know that many of our products are made in china, but not by whom. correct? so to me, the bigger issue is are we hitting the right targets? are we being surgically enough
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to inflict the maximum pain on the regime? versus inflicting the maximum pain on the people of north korea. congress woman wagner and i have introduced the north korea follow the money act, hr-3261. which would direct the director of national intelligence to produce a national intelligence estimate of the revenue sources of the north korean regime. my hope is that this bill will make our sanctions policy more precise and a bit more effective. but i think that we still cannot get away from engaging more people if foreign governments are not willing to engage, everyone's interested in a dooms day clock, it was advanced by another 30 seconds in january.
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and i think that we missed another opportunity to talk about what is happening in the korean area more closely. i would like to ask if you would agree that a clear picture of north korea revenues, if we need to have a better picture of north korean revenues in order for our sanctions to be more effective? >> so congress woman, you're always going to find that i and the treasury department are interested in more intelligence, not less. we are an intelligence driven organization, and the more precise information that can be generated, the better. i would say that one -- you know, about your point about opportunities missed, we're at the point now where enforcement is crucial. we have the various u.n. security counsel resolutions. in the past, it was sometimes
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difficult to judge the proper enforcement of these different provisions because they weren't complete embargoes. you could get into arcane arguments -- >> that's an embarco you can get, for a consumer to be more informed and for the consumer to say i will no longer purchase any goods that come from this country because they are failing to support us in insuring that we have a nuclear safe world. >> i agree 100%. i would highlight two particular areas. you talked about labor. one of the successes that ambassador haley has had at the u.n. is getting past this idea that, well, we will just cap north korean labor at whatever it is, slave labor in these various countries. we're now under the new resolution passed last night, that's going to be wound down. seafood is the other area to talk to consumers about to make sure that we go after any efforts to smuggle north korean food in. >> can you give me a percentage of what north korean revenues
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are enlisted from the sources? >> at this stage, virtually all revenue is illicit and illegal. >> what are our options in dealing with that? >> maritime enforcement. the single most important thing we can do is enforce a complete prohibition on the sale of north korean raw materials. >> thank you. my time has expired. i yield back. >> we go now to congressman ted poe of texas. >> thank you, mr. chairman. thank you all for being here. i think always when we make big decisions we should look at history. my understanding is that the russians, stalin, put the kim regime in power. the first to invade the south, in my opinion, to prevent the west being aware of what's taking place in eastern europe when the soviet union kept moving through and taking that
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area. we've had three kims in charge. they have all been very belligerent. they have all committed crimes. going all the way back to the hijacking of the pueblo to the kll flight 858, the attempted assassination of the south korean president. they have a history of doing bad things, but it's also been the goal that they feel entitled because they are put there by stalin to be in charge of north korea. and as the chairman said, they want to conquer the south. the war has never ended. it's a cease-fire or a truce or agreement not to -- no treaty involved. and we have been played by the kims for years. they talk about causing war, nuclear capability, and the west says, oh, we'll pay you not to do that. if you promise to be nice. and so they promise not to declare war on anybody. they take our money.
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supposedly, to feed their starving people, and what do they do a few years later? they do the same thing. this has been going on all the way back to the clinton administration. they understand one thing, that the west, the united states, can be bought off if they just make a lot of noise about doing bad things to the rest of us. we should understand that. we should understand that being nice and saying that we will take care of you and encouraging them in a diplomatic way to not declare war, has not worked. i'm not saying we ought to go to war. i'm just saying that's what they understand. so the president, this president has taken a different point of view. he's talking in a language that i think little kim can understand. that those days are over. and i commend secretary,
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ambassador nikki haley for her work in getting these two latest rounds of sanctions through the u.n. the idea that the chinese and the russians are going to agree to sanctions on north korea? i think that is a stroke of genius. i don't know how she did that. especially the russians. who started all of this with stalin back in 1950. so i want to know what our options are. not just one, i want to know where we're going. you know, we all want sanctions. well, sanctions. they haven't really done much to stop anything, but we want sanctions, and we want more sanctions. and we want little kim to stop this. but what if he doesn't stop it? what's the u.s.' plan, and sh l surely, the u.s. has a contingency plan down the road. what is it? you're looking at each other. what's the contingency plan?
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sure, we want sanctions. we want to cripple the economy. we want them to stop the slave trade. we want to do all those things. but what if he doesn't? because little kim, he's just not -- he doesn't think like we do. so what are the rest of the options? >> so thank you. yes, mr. congressman, i think we have a strategy. you all have heard from the secretary, from other secretaries. >> what is it? >> it's the pressure strategy. we want to solve this through negotiated settlement peacefully, but we are not taking any options off the table. >> which are? i only have a minute. you have to kind of cut to the chase. what are the other options? >> options to use force, options to use sanctions pressure, to choke off the regime's revenues, et cetera, to get them to come to the negotiating table. i think, you know, we have been very clear about the strategy. we're not going to pay for negotiations, as has been done
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previously, as you mentioned, in past history when we dealt with the regime. they sought payoffs and we made it very clear, the president and the secretary, that we're not going to go down that road this time. we're going to band together with the coalition of global partners to choke off all of their economic revenue, and -- >> so military option down the road if nothing works? >> sure. >> would you agree with that, assistant secretary? >> absolutely. i have said, we're not going to take any of those options off the table. >> i would additionally offer on a much more very precise level, and you'll see it in my full written remarks, but we're targeting two things here. we're targeting his access to hard currency because he needs these dollars for his wmd and missile programs, and we're targeting the way he still has access to the international finance system. we need to rip that out root and stem. that's what we're focused on, shutting down his actions to hard currency through the new
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embargoes secretary haley has gotten in place. these are hard cut-offs. you can under trade in north korean coal. that is a huge revenue left to this dictator given that we have relatively well shut off his arms trade. he's basically been reduced to high volume, low margin commodities, minerals, things like that. we have to choke that off. but secondly, because of lack of enforcement in the international system by countries we talked about china today, russia. he still has access to the international finance system because he has north korean brokers and agents operating with impunity, brazenly abroad in foreign jurisdictions. that has to stop. that is our next step. >> thank you, mr. chairman, for the extra time. >> mr. ted lue of california. >> thank you, mr. chair. and first of all, thank you to the witnesses for your public service. i served on active duty under u.s. pacific command in the 1990s at guam.
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we did a whole series of different exercises, most of them were directed at north korea. it was really good there were no good military options. the reason i bring that up is because diplomatic economic options depends on whether in fact you have a good military option. and often, it's not for us to say. it's dictated by the facts on the ground. and if we do have amazingly great military options, then we might do less diplomacy and less economic sanctions, but if we really have no good options militarily, then you might have to double down on what you're doing. i think it's important to walk through some of those not so very good military options. and let me start with this question. the trump administration's goal is to denuclearize north korea, that's correct, right? we don't know how many nuclear weapons they have. is that correct?
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say that again. >> yes. >> we also don't know where all those nuclear weapons are, correct? they're pretty good at hiding them. >> they're good at hiding things. >> so in order to get rid of those weapons, to get the trump administration's goal through military force, we would need a ground invasion to find those weapons and destroy them. is that correct? >> get the connection. >> since we don't know where the nuclear weapons are, we don't know how many they have, in order to denuclearize a military option, we would these a ground invasion to find those weapons and destroy them, isn't that correct? >> i suspect we would need our department of defense colleagues here to answer that. >> i understand, but for you to do your job, you have to understand the military option, right? let me just go on. north korea also has the knowledge to build nuclear weapons. isn't that correct? >> yes. >> and they've got the knowledge to build icbms.
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you can't unlearn that. so to keep them from doing this in the future, we would need to occupy the country or have south korea, one of our allies occupy the country and keep them from doing this again in the future, isn't that correct, if we were to do this through military force? >> well, i don't know that that's necessarily, and again, i'm putting my old pentagon treaty negotiator hat on, but there are countries that have abandoned their nuclear programs and their missile ambitions, south africa is a good example, argentina is a good example. so there are examples. >> after the use of military force? no, right. through other means. i can understand north korea giving up or freezing the nuclear weapons if we apply economic or diplomatic pressure. but i'm saying if we were to use military force, and they're going to resist it, and to keep them from doing nuclear weapons in the future, we would need regime change to occupy the country. at least that's my sense.
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i don't know how otherwise we would do that. let's just step away from nuclear weapons. they've also got about 5,000 tons of wchemical weapons, isn' that correct? >> they do. >> and this massive conventional arsenal of rockets and artillery and so on, correct? and they can launch all of that at south korea. they can use missiles against japan. they can use missiles against guam. where we have hundreds of thousands of americans in those two areas, correct? and with millions of civilians in all of those areas, correct? with any military option, we wouldn't be able to contain escalation, isn't that correct? >> it's all hypothetical, so i think -- i think it depends on things that are happening, and it depends on a lot of other scenarios, but you're telling the story. so go ahead. >> okay. so defense secretary mattis has
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said basically there are no good military options, and the options would be very ugly. which then leads me to believe that your job is very critical. we essentially have diplomacy and economic sanctions. it seems like if we're going to pursue diplomacy, might it not be a good idea to have an ambassador to south korea that can help us? >> yes. >> okay. where are we with that? why hasn't the president nominated an ambassador to south korea? >> we're working on it. i know the secretary spoke to us the other day. i think we're working on it. >> i'm just saying, it does send a message that we're not pursuing diplomacy seriously and also disrespecting our critical ally, south korea, and i urge the trump administration to get its act together and nominate an ambassador to vouth korea. i yield back. >> thank you. we go to mr. lou zeldin of new york. >> thank you to both of our
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winces for being here. i believe that the administration has done a great job over the course of the first several months in office in making new strides in bringing china to the table, to bring russia to the table, to ramp up sanctions effort to have more multilateral diplomacy, to have increased economic pressure, to engage in further information campaigns within north korea that didn't exist previously. and i think ambassador haley especially deserves a whole lot of credit for her hard work at the united nations with the success that she has achieved there. and we wish her nothing but the best. some of our colleagues have spoken about the idea of not using a military option. i think we all should agree that the military option should be the last possible option that we would be using after everything
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else were to fail. but some of my colleagues would go a little bit further, almost to suggest taking a military option off of the table. and i think from some of the other testimony here and your answers, there's certainly an agreement amongst others who disagree believing that having the military option on the table is one that helps with multilateral diplomacy and increased economic pressure and all of the other efforts. so it would not be wise. it would be unwise to take the military option off of the table. i wanted to ask you a little bit about what that red line is. and has the administration taken a public position on a red line? should it? do you believe we should have one? what does it look like? because for me, the red line should be that north korea should not have daeths north
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korea should not have the ability to deliver a nuclear warhead to the united states. and there's still a component of their development that appears to not be there. the chairman got to it a little bit earlier as he was engaging one of our colleagues on the other side of the aisle as far as surviving reentry. so we have, we're pursuing the diplomacy angle. we're pursuing the economic angle and the information angle. thinking of military options is the last possible option. preparing the whole slate of conventional to unconventional military options, what's that red line? >> well, the assistant secretary and i are here representing the economic sanctions lever and the diplomatic levers in this. i have said that we're determined to pursue a peaceful resolution through negotiated settlement. of course, we're not taking any options off the table. we realize this is a very difficult problem.
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it has been outlined by the congressman lue here, so i think what i would say about red lines, we and secretary of state are determined to use this pressure campaign to get the north korean regime to change its path and to come to the negotiating table with a serious set of proposals on denuclearization. how we verify that, complete irreversible denuclearization is what we're seeking through a negotiated settlement. i think we think we have a lot more room to go to squeeze them and increase the pressure of the international community. and i think we're continuing to see that that strategy is working, that the north koreans are feeling that pressure. and we are focused on getting them back to the table. so i think as far as red lines go for a military option, i would certainly want to defer that question to some future point where we're not as much engaged in the diplomatic and
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economic pressure part of the campaign. >> i personally believe that when the president said that north korea would be met with fire and fury, that if north korea were to attack the united states, they would be met with fire and fury. i was not offended by any means, and i believe that kim jong-un needs to know and as someone who is homicidal, not suicidal, he needs to know that he would be putting himself and his regime at great risk by attacking us. there's a lot of hard work that's been done by administration doubling down, tripling down, and quadrupling down, making a lot of progress. great progress, specifically at the united nations. i would just say if we truly want to prevent north korea from having the ability to deliver a nuclear warhead to the united states, they are getting so much closer to it that if we are actually serious about that
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military option, that we're going to have to start seriously having that discussion because that may be imminent. i yield back. >> mr. mike mccaul, who also chairs the committee on homeland security. >> thank you, mr. chairman. i appreciate that. yeah, i view this as actually probably one of the biggest threats to the homeland, if they are capable of delivering an icbm with a nuclear warhead to either guam or the mainland of the united states. i know looking back historically, his network, this access between pakistan, iran, and north korea, once pakistan got it, we couldn't take it away. iran, we had our own negotiations, and now it looks like north korea has it. and i think once a country has this capability, it's very difficult to take it away. so i don't envy your positions in terms of trying to negotiate our way out of this, and i think
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the last previous administrations have failed to get us to that point, and now we are where we are. and i think iran is probably watching this whole thing play out in terms of what's our next step going to be as well. i'm not going to get into military options. i know it's not your expertise. i do think cyber should be looked at as something that could be done to shut them down. and i know we have a tremendous capability in that regard. my question is, and i know it's been talked a lot about russia and china, are they going to cooperate with the sanctions and how much leverage is china putting on north korea. but my question really has to go to the more illicit side of the house. kim jong-un has this north korean office 39 that raises -- basically sells drugs, illegal
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exports of minerals frk counterfeits, cigarettes, a lot of other things. what are we trying to do to counteract that, and also when it comes to proliferation and the sale of arms, can you tell me how much do you estimate north korea is making off proliferation to countries like iran and syria? >> congressman, it's good to see you. >> you, too. >> so one of the things that's very important to underscore is that the treasury department and the authorities we wield are not, as you know from your time with the department of justice, they are not just sanctions. sanctions is one of many tools we have. what we use to in effect collapse the bank was not a sanction. it was a section 311 under the patriot act, action to root out the north koreans in that bank. in terms of the proliferation of weaponry, because of previous
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u.n. security council resolutions, we have been able to dry up much of the illicit sales that they were engaged in to various african regimes and so on. there are still several transactions that they periodically float that we are actively engaging various countries to deter signing of contracts and go down that road. it would be unwise for them to take those actions. we're on a full-court press on that. because of the success ambassador haley has had at the u.n., in effect, nearly every export coming out of north korea today as of last night, nearly every export is now illicit. textiles are now illicit. you can not trade in north korean textiles, basic minerals anymore. under the previous administration, talking about bureau 39. one of the things they would do is sell these huge overpriced bronze statues and the weapons were the kicker on the side.
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as a little sweetener for paying six times the going rate for a bronze statue. so that organization was sanctioned and under our administration, we started rooting out the rest of that particular arts and monuments revenue generating scheme. north korean labor is another category that they're getting significant money from. and with the results last night, there's now not a freeze or a cap on north korean laborers. there's a requirement to wind it down. i'm not a big fan of wind-downs because it's real hard to verify that. but that is nevertheless a big step forward, and we intend to enforce that as well. i have reiterated on multiple occasions with counterparts in the gulf and elsewhere that we need to see the north koreans gone. the department of state has been very active on this front, and we are seeing a drying up of revenue associated with the slave labor that the north koreans employ. >> if i can, and to my last
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question, north korea proliferating weapons to iran and syria. >> so we do track any kind of illicit proliferation networks from the north koreans and go after those transactions. again, with colleagues, treasury and other agencies in the u.s. government, when we find them, we try to block them or deter them, and we have had some success. it's a continuing effort on our part. and we devote a lot of attention to that in our bureau of nonproliferation. >> but it is happening? >> i think there are transactions that we are worried about, yes. >> okay. and i know some of that may be in another setting than this. so thank you very much. >> well, i want to thank the witnesses for their testimony. i thank you for answering the members' questions here today. i'm sure more of those questions will be submitted for the record. for you to answer. there are a few issues that are urgent for us, but i don't think
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any of them are more urgent than the north korean threat at this time. and to its credit, the administration recognized this early on. secretary tillerson's first focus as secretary of state was north korea. and he has been extensively engaged, working with allies in the region while pressuring china and russia and other countries that are funding the kim regime. we need more sanctions, tougher sanctions. we need to supercharge this right now. and the administration is moving in the right direction. and china, each day, is rethinking the cost of its financial support for north korea. the administration's focus on korean slave labor abroad is very good. sanctions are just one element of power. we need to bring to bear. we need to stop giving only lip service to the power of information inside north korea
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broadcasting information in to change attitudes and conditions in north korea. we simply aren't doing this well enough. and it must be a priority. and again, thank you for your testimony. we look forward to your follow-up, and this hearing stands adjourned.
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the u.n. security council unanimously adopted a new round of sanction said yesterday against north korea in retaliate for its latest ordinance test which sent a missile over japan. after the 15-0 vote in favor of the new sanctions, members of the council and a representative of south korea called on the
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north korean government to halt its efforts to develop a long-range nuclear missile. the sanctions imposed will ban all natural gas imports and textile exports. and cap north korea's annual oil and petroleum imports. here's the hour-long debate. the 8,042nd meeting is called to order. the provisional agenda for

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